select
|

Are you buying into or selling in a seller's market?

South African home buyers and property trend watchers in the bigger centres are now regularly told that property market conditions have improved sufficiently to justify the belief that they are now in a seller’s market.

How does a potential home seller (or for that matter a buyer) decide if this is in fact true of the area in which he lives or hopes to live?

An initial, very obvious question to ask, said Tony Clarke, Managing Director of the Rawson Property Group is, “Are there any repossessed homes still awaiting sale in the area?” 

If there are several such forced sales on the go, he said, it is a sure sign that the area has still not fully recovered from the downturn and cannot be described as a seller’s market. At the moment there are relatively few such areas in South Africa but the question regarding them is nevertheless worth asking.

“Bear in mind,” he said, “that repossessed homes usually sell below their true market value and therefore not only spoil the area’s image but will in all probability also lower the average price of homes in their vicinity.”

The second question to ask, said Clarke, is “How long are homes taking to sell?”

“In the Rawson Property Group we have a number of franchises that are now regularly selling homes within two to four weeks of their being listed.  We also have some which quite frequently report sales taking place within 48 to 72 hours of the property coming onto the market.  Quite obviously in such areas, if stock is available, it has to be recognized that the market is very much slanted towards the seller.”

However, said Clarke, in general he would still accept the current rule of thumb that if, in today’s market conditions, a home sells within four months its area could be described as being a seller’s market and if it takes longer than six months to sell, the market cannot be described as being in favour of the seller.

Another factor to be assessed (if possible) is the general prosperity of the area in which the house is sited.  For example, said Clarke, now that the platinum mine strikes are over, Rustenburg property is already beginning to rise in price again.  Similarly, he said, Johannesburg’s CBD property, where massive Third World type trading is now prevalent throughout, is also seeing a significant rise in prices.

Clarke added that if, as he has suggested, many areas are now quite decidedly in a seller’s market, the next question to be asked is, “How long will these conditions last?”

“In answering this question, he said, “one has to refer to the major bank analysts and the consensus of opinion among them is that the tightness of today’s economy, rising interest rates, severe stock shortages and the banks’ very cautious approach to awarding loans will probably result in slower sales but also in continually rising prices in the year ahead.  Demand at the lower levels of the price spectrum is so strong that it is bound to affect price growth.  It would also be wise, I believe, to accept that growth will, as the banks have predicted, be only around 7 or 8% for much of the remainder of this year.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK